Trump's tariff wars...long post.

[NancyJohnson]

I have a reasonably decent grasp on the economics of tariffs and the protectivism this alludes to give to home market manufactured product.  (In case you don't understand how tariffs work, who actually pays what and where the money goes, I've links a pair of videos below).

 

If Trump's tariff directive pans out the way he wants this will, in all probability, lead to tit-for-tat tariffs; if the UK then imposes a tariff on US imports, everything will go up in price from your preferred bourbon to those much desired Musicman and Fender USA basses.  

 

Even if a 10% tariff is applied on a £1,500 USA bass, sure as hell this won't go up to £1,650...we've adopted (and improved) the greed model in this country, so expect a number nicely rounded up to £1,750.  Well, maybe.  It won't be a flat 10%.

 

If all this pans out and everyone is paying more, will this make you look to homegrown, far-eastern or European manufacturers over US ones?

 

 

 

 

 

Edited 5 hours ago by NancyJohnson
Renamed subject ..

[BassApprentice]

I understand the want to keep everything on home soil and create jobs - but it can't be as simple as just imposing a tariff and there you go.

 

Can only imagine that the people who benefit from this are, once again, the super rich.

Edited 5 hours ago by BassApprentice

[chris_b]

Laurence O'Donnell is always very good.

 

The US can probably outlast most world economies in a stand off.

 

The UK needs to find other markets, and quick.

[Crusoe]

I read something earlier that the US exports more to the UK than it imports from us, so there is a chance that he may not apply tariffs to that market. Europe, on the other hand, could be in trouble, especially car manufacturing.

[NancyJohnson]

It's interesting watching a handful of MAGA-types being quizzed about tariffs, this belief that it'll be China (etc.) who will be paying, not the importer.

 

[Obrienp]

Trump has said that his differences with the UK on trade can probably be worked out. Hasn’t stopped the stock market following European markets in losing value.

 

There are multiple reasons why it would be a good thing for the world to make manufacturing more local: less pollution; less energy consumption; increased security of supply, etc, but you have to create the environment for local manufacture to flourish first. That means investment in science, technology, infrastructure, training, the list goes on. It can’t just be turned on by a bit of protectionism.

[zbd1960]

Protectionism doesn't work, and was a major cause of the depression when the US did similar in 1929...

 

If your country is able to source, supply, and make everything, but prices are being undercut by 'dumping' |(something China has indulged in) then that is a valid case where tariffs would make some sense as it would encourage use of local resources.

 

However, that is not where the world is. No-one - not US, not Europe, not UK - has all the resources they need to make things, has the manufacturing capability to make things, has the infrastructure to make things.

 

Tariffs will not work in this scenario. It is highly inflationary. It will do a lot of damage to many economies, many of which still have not recovered from the impact of Covid. Many economies, e.g. UK, are now service based economies not manufacturing based. Such economies cannot avoid importing components and finished goods.

 

Edited 5 hours ago by zbd1960

[neepheid]

But we on the whole don't want your stupid big cars... tariffs aren't going to change that.  Hey, America - make better/more appropriate stuff that we'd want to buy if you're so concerned about a trade deficit, you dunces!

[Woodinblack]

1 hour ago, NancyJohnson said:

If all this pans out and everyone is paying more, will this make you look to homegrown, far-eastern or European manufacturers over US ones?

 

For me, largely irrelevant, in that there are no US guitars that I would particully be in the market for, and if I was, they wouldn't be new ones, although I realise the new price also affects the second hand market. I think from a stringed instrument point of view I would pretty safe there, although there are other musical instrument things that would be a problem. Either way, I can't see it as that major an issue compared to many other day to day issues.

I think is however a clear indication that we should be putting more effort into our fractured trade relationship with europe.

[12stringbassist]

Trump basically wants to brutishly offend other countries and wield power.
It doesn't matter what the fallout is as far as he is concerned. He's there for the fight.
I imagine the effect here will be that a number of guitar and amp stockists give up on the big USA names.
Well done, Don.

As said in the post above, we need to sort some things out with Europe.

[Woodinblack]

1 hour ago, BassApprentice said:

I understand the want to keep everything on home soil and create jobs - but it can't be as simple as just imposing a tariff and there you go.

 

Unless you can quickly ramp up that manufacturing, no. If you could make iPhones in the US for the same price as you could in china, you wouldn't be making them in China. You can apply a 100% tarrif on them, they would still be cheaper there, but noone would be buying because they would be too expensive (more than they already are).

[chris_b]

Trump will get around to us in time. He wants the NHS and to offload their additive and pesticide ridden food stuffs on us, and that will be the basis of any trade deal. If we don't give it to him then watch out for massive tariffs. The US is our largest market so Trump can destroy our economy in a matter of months. We need a deal with the EU and France knows it. We will pay either way.

Edited 3 hours ago by chris_b

[Bolo]

2 hours ago, chris_b said:

The US is our largest market so Trump can destroy our economy in a matter of months. We need a deal with the EU and France knows it. We will pay either way.

UK trade with EU and non-EU countries in the 4 quarters to the end of September 2024

 

Trade value in £billion

UK exports to the EU 346.1 -1.9%

UK imports from the EU 444.8 -0.4%

UK exports to the non-EU 496.5 -3.5%

UK imports from the non-EU 417.6 -3.2%

 

The EU is your largest market. Of the non-EU exports only ~188b is with the USA.

 

Trump CANNOT destroy your economy, let alone "in months".

 

This fear and panic mongering is worse than useless. 

 

Edit for source: https://www.gov.uk/government/statistics/uk-trade-in-numbers/uk-trade-in-numbers-web-version

Edited 1 hour ago by Bolo

[Obrienp]

I’m in risk of using the B word here. Suffice it to say: together we stand, divided we fall.

 

WRT US musical instrument and gear companies, I would venture a guess that the majority of units sold in this country are manufactured in the Far East and shipped here directly.  Gibson and the other acoustic guitar makes (Martin, Taylor, etc) perhaps being exceptions. I doubt Fender’s US made ranges sell anything like the number of units that Squier do. Would the Far Eastern and MIM made stuff avoid any retaliatory tariffs the UK might impose? Nearly all the electronic stuff like amps, cabs, pedals, etc, is definitely made in the Far East.

 

Tariffs against US components could have a knock on effect on UK and European manufacturers. Barefaced for instance, use Eminence bass drivers, which are made in the US. Now might be a good time to get your order in for a Barefaced cab! 

[Obrienp]

19 minutes ago, Bolo said:

UK trade with EU and non-EU countries in the 4 quarters to the end of September 2024

 

Trade value in £billion

UK exports to the EU 346.1 -1.9%

UK imports from the EU 444.8 -0.4%

UK exports to the non-EU 496.5 -3.5%

UK imports from the non-EU 417.6 -3.2%

 

The EU is your largest market. Of the non-EU exports only ~188b is with the USA.

 

Trump CANNOT destroy your economy, let alone "in months".

 

This fear and panic mongering is worse than useless. 

 

Edit for source: https://www.gov.uk/government/statistics/uk-trade-in-numbers/uk-trade-in-numbers-web-version

I get what you are saying but it depends on your perspective. The UK exports more to the USA than any other single country by a huge margin. It represents over a third of our non-EU exports. That is a big chunk to lose (potentially) and given the perspective of the UK press (mostly right-wing anti-EU biased) and populist politicians, it will cause a huge political storm for the Government to deal with, when they are already embattled.

 

It is not logical but you can’t apply logic to UK politics. It is almost entirely driven by emotion and fear.

[TimR]

It's a form of Disaster Capitalism, but unlike any other. Intentionally crashing the world economy in order for the few billionaires to steel absolutely everything. 

 

My next door neighbour lost his business to a very shady venture capitalist during/after Covid. I have no doubt this is their ultimate aim. 

 

 

[TimR]

US Markets are falling as we write. 

[JoeEvans]

I think Trump is doing a Truss here - a policy move based on the wilfully ignorant application of dogmatic belief, that will crash the US economy and his own political support.

[Obrienp]

2 minutes ago, JoeEvans said:

I think Trump is doing a Truss here - a policy move based on the wilfully ignorant application of dogmatic belief, that will crash the US economy and his own political support.

Some might say it’s a good thing then. In the meantime my pension pot will lose value hand over fist as markets nose dive. It’s only just recovered from the last 5 years of chaos! 😭

[chris_b]

9 minutes ago, JoeEvans said:

I think Trump is doing a Truss here - a policy move based on the wilfully ignorant application of dogmatic belief, that will crash the US economy and his own political support.

 

Trump will just blame everyone else, like Truss does. The US mainstream media won't hold him to account, because the billionaires who own the media are Trump donors. Sadly his supporters will accept his lies.

[tegs07]

I haven’t got a clue what the potential upsides are. It seems to me that big businesses got a hard on offshoring manufacturing and lower tier service sector jobs to countries that have labour conditions that should be outlawed in this century. Now these countries have high level engineering, technical, services, financial sector etc and are looking increasingly likely to take the business away from their western counterparts.

Not sure what the solution is but Tariffs are certainly not going to help in the short term.

[chris_b]

54 minutes ago, Bolo said:

Trump CANNOT destroy your economy, let alone "in months".

 

 

Where are we going to sell goods worth £188 billion if the US stops buying expensive UK products? No one is going to wave a magic wand or step in to bail us out. They will be fighting their own battles with tariffs. Where will domino effect end?

[Count Bassy]

6 minutes ago, chris_b said:

 

Where are we going to sell goods worth £188 billion if the US stops buying expensive UK products? No one is going to wave a magic wand or step in to bail us out. They will be fighting their own battles with tariffs. Where will domino effect end?

I think the key word is "destroy". Badly affect, yes. Destroy, No.

[Al Krow]

32 minutes ago, TimR said:

US Markets are falling as we write. 

 Not by that much though: they fell much more a week ago wiping $billions off tech companies when a little $6m upstart outfit by the name of DeepSeek came to everyone's attention.

 

23 minutes ago, Obrienp said:

Some might say it’s a good thing then. In the meantime my pension pot will lose value hand over fist as markets nose dive. It’s only just recovered from the last 5 years of chaos! 😭

 

Don't panic: UK stock markets are still pretty much at the highest they've ever been! Sure they are down 1% today but they're still up 4% (instead of 5%) in just one month since the start of the year. That doesn't feel like a crash to me! By way of comparison they fell 30% in two days when Covid hit.

 

The pound is surging against the Euro right now - why? 'Cos the expectation is we're not going to be hit with these Trump tariffs anything like as badly as the EU. 

 

Think I'm gonna pick up my bass and do some fretting in a different way 😅